Nebius Group Plummets 6.14%: Can AI Infrastructure's 'Once-in-a-Generation' Opportunity Weather the Storm?

Summary
• Nebius Group (NBIS) trades at $70.705, down 6.14% intraday amid a $1.68B cash hoard and 625% Q2 revenue surge.
• Intraday range spans $69.40 to $75.21, with a 52-week high of $75.96 and dynamic P/E of 17.92.
• Sector peers like Amazon (AMZN) rally 1.28%, while AI ETFs like ROBO Global AI ETF (THNQ) edge up 1.04%.
• The stock’s sharp decline defies its blockbuster Q2 results, raising questions about valuation sustainability and execution risks in a hyper-competitive AI infrastructure landscape.

Valuation Realities Clash with AI Infrastructure Optimism
Nebius Group’s 6.14% intraday plunge reflects investor caution amid its 625% revenue surge and $1.68B liquidity. Despite raising 2025 ARR guidance to $900–$1.1B, the stock’s 16x price-to-sales ratio and 4.7x price-to-book valuation clash with sector peers like Amazon and Microsoft, which dominate cloud infrastructure with scale and diversified offerings. The selloff may also stem from profit-taking after a post-earnings rally, with the stock testing its 50-day moving average of $53.71. Broader skepticism about AI infrastructure valuations—despite Nebius’ expanding client base (Cloudflare, Shopify)—weighs on sentiment.

Data Processing Sector Rally as Amazon Gains 1.28% – Nebius Diverges Amid Volatility
The Data Processing & Outsourced Services sector, led by Amazon’s 1.28% intraday gain, benefits from global outsourcing trends and AI-driven demand. Nebius, however, diverges from this trend, trading down 6.14% despite its AI infrastructure focus. This divergence suggests the market is parsing Nebius’ standalone fundamentals—its 625% revenue growth and $1.68B cash balance—against sector-wide optimism. While Amazon’s scale and diversified cloud offerings drive sector momentum, Nebius’ niche positioning and high valuation may be attracting profit-taking or short-term skepticism.

Navigating Nebius’ Volatility and AI Sector Momentum
• 200-day average: $34.50 (well below current price)
• RSI: 83.74 (overbought territory)
• MACD: 5.21 (bullish divergence)
• Bollinger Bands: Price at $70.705, below upper band ($70.88)
• 50-day MA: $53.71 (critical support level)
• 200-day MA: $34.50 (long-term floor)
• ROBO Global AI ETF (THNQ): +1.04%
• Themes Cybersecurity ETF (SPAM): +0.76%

Nebius is testing critical support at $70.84 (intraday low) and the 50-day MA ($53.71). A break below $70.84 could trigger a retest of the 200-day MA ($34.50), while a rebound above $75.21 (intraday high) may reignite bullish momentum. The ROBO Global AI ETF (THNQ), up 1.04%, and Themes Cybersecurity ETF (SPAM), up 0.76%, offer sector exposure for AI-focused investors.

Top Options:
1. NBIS20250822P71 (Put)
• Strike: $71, Expiry: 2025-08-22
• IV: 71.41% (moderate)
• Delta: -0.477 (moderate sensitivity)
• Theta: -0.007 (low time decay)
• Gamma: 0.0475 (high sensitivity to price swings)
• Turnover: $50,214
• Payoff (5% downside to $68): $3.00 (K - ST = $71 - $68 = $3, minus premium).
• Why: High gamma and moderate IV make this put ideal for capitalizing on a potential breakdown below $70.84.

2. NBIS20250822C70 (Call)
• Strike: $70, Expiry: 2025-08-22
• IV: 79.38% (high)
• Delta: 0.568 (moderate sensitivity)
• Theta: -0.3379 (high time decay)
• Gamma: 0.0422 (high sensitivity)
• Turnover: $173,025
• Payoff (5% upside to $75): $5.00 (ST - K = $75 - $70 = $5, minus premium).
• Why: High liquidity and gamma suit this call for a rebound above $75.21. Aggressive bulls may consider NBIS20250822C70 into a bounce above $75.21, while bears eye NBIS20250822P71 for a breakdown below $70.84.

Backtest Nebius Group Stock Performance
The backtest of NBIS's performance after an intraday plunge of -6% shows favorable results. The 3-Day win rate is 62.37%, the 10-Day win rate is 68.82%, and the 30-Day win rate is 82.80%. Additionally, the maximum return during the backtest period was 46.38%, with a maximum return day at 59.

Nebius at Crossroads: Watch $70.84 Support and Amazon’s Lead for Clarity
Nebius’ 6.14% decline has created a pivotal juncture for investors. While its Q2 results and $1.68B cash balance underscore long-term potential, the stock’s near-term fate hinges on support at $70.84 and the broader AI sector’s momentum. Amazon’s 1.28% gain highlights sector strength, but Nebius must prove its valuation is sustainable. Traders should monitor the 50-day MA ($53.71) as a critical floor and consider options like NBIS20250822P71 for downside protection. With AI infrastructure demand surging, Nebius’ ability to maintain its growth trajectory will determine whether this selloff is a buying opportunity or a warning sign. Watch for $70.84 breakdown or Amazon’s lead in the Data Processing sector.